Central Government slashes interest rates up to 1.1% on small savings, 6.4% on PPF, 5.6% on NSC

Sponsored Links
  • Narendra Modi Government slashes interest rates up to 1.1% on small savings schemes, 6.4% on PPF ( Public Provident Fund), and 5.6% on NSC (National Savings Certificate).
  • This decision was made by the Ministry of Finance in the form of an announcement on Wednesday during the first quarter of the financial year 2021-2022. 
  • The announcement was basically made by the Union Finance Minister Nirmala Sitharaman and according to her, there will be slashing/ sharp cutting on the interest rates upon the small saving schemes, PPF as well as NSC. These rates happened to stay unchanged for the last three quarters.
  • Since the year 1974, the interest on Public Provident Fund (PPF) scheme was never as below as 7 per cent. It was recorded with 7.1 per cent during the January-March period, but for the first time since 1974, the PPF is observed below the margin of 7 per cent that is, it is the April-June quarter is recorded with 6.4 per cent. 
  • Under the same condition, it is for the very first time that the interest rate of the savings deposit has been brought down to 0.5 per cent from 3.5 to 4.0 per cent annually. 
  • Having said that the Modi Government has cut down the rate of interests upon various schemes, the deduction on Small Savings Schemes was observed by up to 1.1 Per Cent.
Sponsored Links
  • Interest rates for small savings schemes are generally notified on a quarterly basis. Therefore, the interest rate on various small saving schemes for the first quarter of the financial year 2021-22 will begin from the first of April, 2021 and shall end on June 30th, 2021. 
  • A steep reduction has also been seen on the five-year senior citizens savings scheme from 6.5 per cent down to 0.9 per cent that is paid quarterly. 
  • The steepest fall is affected to the one-year term deposit with an interest reduction of about 1.1 per cent. The new rate will be 4.4 per cent as compared to 5.5 per cent at the moment. Similarly, another steepest fall was affected to two-year fixed deposit with 0.5 per cent interest rate.  willthree-year term deposit rate will be down by 0.4 per cent and five- year term deposit rate will be lower by 0.9 per cent at 5.8 per cent.
  • The girl child savings scheme Sukanya Samriddhi Yojana account will offer 0.7 per cent lower rate at 6.9 per cent rate during the first quarter of the next fiscal.
  • Meanwhile, the annual interest rate on Kisan Vikas Patra (KVP) has been reduced by 0.7 per cent to 6.2 per cent from 6.9 per cent.
  • While announcing the quarterly setting of interest rates in 2016, the finance ministry announced about the possible rates of small savings schemes linking to the government bond yields.
  • This is henceforth, the fourth time in a row when the Reserve Bank of India (RBI) statically put forward the interest rates at an inflationary concern of 4 per cent. 

Revision of Interest rates for Small Saving schemes

InstrumentsRates of interest from 01.01.2021 to 31.03.2021Rates of interest from 01.04.2021 to 30.06.2021Compounding Frequency*
Savings Deposit4.03.5Annually
1 year time deposit5.54.4Quarterly
2-year time deposit5.55.0Quarterly
3-year time deposit5.55.1Quarterly
5-year time deposit6.75.8Quarterly
5-year recurring deposit5.85.3Quarterly
Senior Citizen Savings Schemes7.46.5Quarterly and paid
Monthly Income Account6.65.7Monthly and paid
National Savings Certificate6.85.9Annually
Public Provident Fund Scheme7.16.4Annually
Kisan Vikas Patra6.9 (will mature in 124 months)6.2 (will mature in 138 months)Annually
Sukanya Samriddhi Account Scheme7.66.9Annually
Sponsored Links

Central Government Gifted Rs. 10,000 For All Central Government Employees As per 7th Pay Commission:

Sponsored Links
  • Modi Government has decided to gift Holi bonus worth Rs. 10,000 to all the central government employees in advance under Special Festival Advance Scheme as per the 7th Pay Commission of India.
  • Holi festival is just a few days away falling on the last week of March 2021. This is indeed a good news for all the employees working under the Central Government and shall be granted without any interest.
  • The genuine motive behind this advance is to make sure the employees are handy with good sum to celebrate this major festival during the ending week of the month.
  • Not only this, during the Coronavirus pandemic period, the central government had to freeze the DA (Dearness Allowance) of every central government employee so as to accumulate enough funding to stable the falling economy.
  • This was however a major blow to all the employees. Thus, the government decided to provide a relief during the cheerful events to make them spend their money freely during Holi. Later, employees can pay it back in 10 installments i.e., Rs. 1000 per month.
  • The last date to avail the cash under Special Festival Advance Scheme is March 31, 2021. 
  • The bonus will be paid to each of the employees in the form of a RuPay Card.
  • Announcement for the grant of this bonus was already made by the Union Finance Minister Nirmala Sitharaman during the 2021 Union Budget. He also added that the bonus will be a form of advance payment that will be preloaded in the RuPay card before the distribution. This money will already be there in the ATM of central government employees and they just need to spend. 
  • The Department of Expenditure of the Ministry of Finance has already issued the Office Memorandum therefore which the Order shall be effective till 31st of March, 2021.
Sponsored Links
  • Previously, as per the 6th Pay Commission, employees used to get a festive advance of Rs 4,500. But now the government is giving an advance of Rs 10,000. This decision is included in the Seventh Pay Commission.
  • Last year in the month of October, the central employees were granted same bonus amount also worth Rs. 10000 in the form of UTSAV RuPay Card. The cards were primarily distributed by the State Bank of India (SBI). The validity for this card is substantially put to form on October 12, 2020, still continuing to end on 31st of March, 2021.
  • Below there is a list of details regarding this Advance Festive Scheme. This explains briefly about how should the card be utilized, and other factors.

Check out the details of the scheme below:

  1. The bonus shall be worth of 10,000 Indian Rupees.
  2. The cash is an interest free advance and can be returned in 10 easy installments.
  3. The installments must be carried out with a sum of Rs. 1000 continuously for 10 consecutive months.
  4. Employees will be given this loan in the form of a prepaid RuPay card.
  5. State governments also have the option of offering festive advances on the lines of festive advances provided by the union government.
Sponsored Links

7th Pay Commission – Increase in Salary by March 2019

Sponsored Links

Seventh Pay Commission:

Seventh Pay Commission or the Seventh Central Pay Commission established in February 2014. The basic duty of 7th CPC is to check the regulations and configuration of the compensations related to pay of all the central Government employees along with the Defense forces of India. The Government of India introduced this pay commission to analyze the work and pay system of the employees working for the Government of India.  After analyzing the work and pay structure of the employees, the commission will make suggestions to the Government of India to fulfill the needs of the central Government employees including defense forces.

Sponsored Links

Salary Hike by March 2019:

The Great news for all the Central Government employees after a long wait is the pay hike will be announced officially in the March 2019. And the salary hike will be based on their DA. Basing on this fact the employees can calculate their pay hike with their current salaries depending on their designations & levels.

S.NO Level or Designation of the Employee Basic Pay of the Employee After Increase in 2% DA
1 Level 1 RS 18,000/- Rs 360/-
2 Level 2 RS 19,900/- Rs 398/-
3 Level 3 RS 21,700/- Rs 434/-
4 Level 4 RS 25,500/- Rs 510/-
5 Level 5 RS 29,200/- Rs 584/-
6 Level 6 RS 35,400/- Rs 708/-
7 Level 7 RS 44,900/- Rs 898/-
8 Level 8 RS 47,600/- Rs 952/-
9 Level 9 RS 53,100/- Rs 1062/-
10 Level 10 RS 56,100/- Rs 1122/-
11 Level 11 RS 67,700/- Rs 1354/-
12 Level 12 RS 78,800/- Rs 1576/-
13 Level 13 RS 1,18,500/- Rs 2370/-
14 Level 14 RS 1,44,200/- Rs 2884/-
15 Level 15 RS 1,82,200/- Rs 3644/-
16 Level 16 RS 2,05,400/- Rs 4108/-
17 Level 17 RS 2,25,000/- Rs 4500/-
18 Level 18 Rs 2, 50,000/- Rs 5000/-

Sponsored Links